Fisheries Committee on May 3rd, 2018

[The Chair, Liberal, Bernadette Jordan]

Good morning, everyone. Welcome to the 100th meeting of the Standing Committee on Fisheries and Oceans in the 42nd Parliament. Pursuant to order of reference on Monday, April 16, 2018, we're studying Bill C-68, an act to amend the Fisheries Act and other acts in consequence.

Today for the first hour we have with us, from the Fisheries Council of Canada, Paul Lansbergen, president; from the Forest Products Association of Canada, Kate Lindsay, Director, Environmental Regulations and Conservation Biology; and via teleconference we have Bernie Berry, President, Coldwater Lobster Association.

Also with us today we have Cathay Wagantall from Yorkton—Melville. Thank you for joining us today.

We have the Honourable John McKay from Scarborough—Guildwood. Thank you for coming. I hear you say it's the centre of the universe, but I challenge you to come to Nova Scotia.

We will get started with our first witness today from the Fisheries Council of Canada, please. Mr. Lansbergen you have 10 minutes.

[Paul Lansbergen, President, Fisheries Council of Canada]

Thank you very much.

Thank you for the opportunity to be with you this morning. Bill C-68 represents a significant modification of the Fisheries Act and will have long-standing implications for the sector and the health of our oceans and fish resources.

Before I get into specific comments on the bill, I would like to spend a few minutes to provide some context about the council, the sector, and the policy reality in which we currently find ourselves.

The Fisheries Council of Canada is the national voice for Canada's commercial fisheries. Member companies are processors who process the majority of Canada's fish and seafood production. Our members include small, medium-sized, and larger companies, as well as indigenous enterprises that harvest fish in Canada's three oceans and inland waters.

Canada is a global leader in sustainable fisheries management, with 80% of our Canadian wild seafood production, by value, being certified by the Marine Stewardship Council. This figure is in contrast to the only about 10% of the world's fisheries that are certified. The Canadian seafood industry creates 80,000 direct jobs, mainly in coastal and rural communities, and accounts for $7 billion in exports to 139 countries in the world. Our largest export markets are the U.S., China, the EU, and Japan.

The council is looking towards advantages created by such recent free trade agreements as those with South Korea, the CETA, and the CPTPP. Growing global demand for protein, including fish and seafood, points to more growth in Asian markets and elsewhere. In addition to trade opportunities, we have opportunities to realize more value from what we harvest today. A recent study has indicated that the sector is missing out on $600 million of additional revenue annually. These growth opportunities provide important context for my remarks today.

The most significant policy issue facing the sector is a concern about stability of access to the fishing resource. Recent actions and announcements from DFO have undermined the sector and therefore undermined the economic growth of Canada's coasts. Taking away long-standing licences and quotas does not respect past investment, has eroded the sector's confidence to invest, and could undermine conservation efforts.

This is not an issue for just one part of the sector. There are two reasons for this. One is that the concern is widespread. The second is that the supply chain is highly interdependent. For example, fish harvesters rely on their local fish processor to purchase their catch in order to bring their products to market. With the growth opportunities I mentioned a moment ago, we need to accelerate investment to extract more value from what we harvest and process. Much of this growth will only be realized by investments in new technology and practices. This and other growth opportunities won't be achieved in the absence of a clear and stable policy framework. Unfortunately, such is currently lacking in Canadian fisheries.

This concern also creates a lens through which the sector views Bill C-68 and the pending regulations, under new authorities provided by the bill. FCC views positively the habitat provisions that have been restored. These provisions have undergone significant consultation through the committee process. However, there are a number of other broad changes contained in the bill, particularly the new regulations, that could benefit from more thorough consideration.

Given the enabling nature of the bill, the council reserves judgment on the bill pending the development of the regulations authorized, which could take up to three years or more to be completed. Having said that, I would like to highlight three key messages. Our submission goes into more details and provides commentary on a number of the regulatory provisions, if you're interested.

The first is that FCC would like a better reference to the use of fisheries as part of the purpose of the act in proposed new section 2.1. As part of the 2017 consultations, we submitted the following:

‘Sustainable Use’ has been the primary implied principle of the Fisheries Act since its inception, and this primacy must be maintained/strengthened in any revised Act; care must be taken that the introduction/drafting of any additional principles/purpose etc. not diminish this primacy.

It is not clear that this has been achieved in Bill C-68. The first element of the purpose in proposed paragraph 2.1(a), “the proper management and control of fisheries”, is quite broad. Case law is clear that the minister can make decisions based on a wide range of considerations. The use of fisheries is missing in the current wording of the bill. FCC asked the committee to consider this, as participants in the fisheries sector and their communities rely on the economic benefits from Canada's fish resources. It is paramount that such use of our resources be sustainable. Failing to do so will only lead to economic hardship in the future and undermine the vital role this sector plays in Canada's coastal economy.

FCC submits for consideration an amendment to the purpose clause that would make explicit the sustainable use of fisheries as the primary purpose of the act. The wording we propose in proposed section 2.1 is that the purpose of the act is to “(a) ensure the sustainable use of fisheries; and (b) provide a framework for (i) the proper management and control of fisheries; and (ii) the conservation and protection of fish habitat, including preventing pollution.” This is in our submission. Essentially, we have inserted a new paragraph (a) and have moved the rest down.

My second message is related to indigenous participation and co-management. Bill C-68 provides significant new authorities relating to indigenous participation in and co-management of fisheries. Co-management agreements are authorized by the new proposed section 4.1 if provisions are deemed “equivalent” to provisions in the act. However, there is currently no legal test for equivalency in this context. Moreover, both the act and the bill fail to set any considerations that the minister or Governor in Council must—or may—consider when determining equivalency. This applies in terms of equivalency in provision and its administration or enforcement. Of particular concern is a potential for different management regimes across different fisheries, which could potentially negatively impact the sustainability of our fisheries resource.

According to the Ahousaht case in B.C., bilateral negotiations of what the fishing right means in practice are unacceptable. DFO does not represent the interests of other sector participants, such as commercial or recreational fisheries, and these interests must be included. The FCC believes there needs to be a clear process for involvement of other impacted stakeholders in co-management negotiations and a process in place to avoid a patchwork approach to the management of a resource that undermines overall sustainability.

In the same case, the crown testified that it is willing to use the allocation transfer program and the Pacific integrated commercial fisheries initiative to increase indigenous participation in fisheries. Moreover, Madam Justice Humphries stated:

Canada takes the position that access under PICFI and ATP is relevant to the access provided under the right, in particular because reconciliation is achieved through voluntary relinquishment of licences by commercial fishers. It is not necessary and is unhelpful to the principles of reconciliation to move to involuntary relinquishment of licences by the commercial sector.

Unfortunately, this is not the approach that has been taken in the surf clam fishery. A lack of clear criteria and policy has created a climate of uncertainty and instability in the fisheries management. The FCC strongly believes the government needs to adhere to a willing buyer, willing seller policy, as it has done historically.

My third message relates to the many regulations authorized by the bill. FCC looks to how these regulatory provisions can contribute to greater stability of access and thereby instill confidence to invest and support conservation. At the same time, FCC has cautions in terms of the government's ability to anticipate how the sector will evolve over time—quite frankly, I don't know if anyone can. Smart regulations will provide flexibility to accommodate the ongoing evolution of the sector.

FCC hopes this legislation and its subsequent regulations will provide a clear and stable policy framework that will facilitate and enable the fisheries sector to be prosperous long into the future. We look forward to continuing the dialogue with the government and parliamentarians on the details of the bill and subsequent regulations.

With that, I welcome any questions you might have. Thank you.

[The Chair, Liberal, Bernadette Jordan]

Thank you very much.

We will now move to Kate Lindsay, Director of Environmental Regulations and Conservation Biology for the Forest Products Association of Canada, for 10 minutes, please.

Go ahead.

[Kate Lindsay, Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada]

Thank you.

Thank you for the opportunity to provide our perspective as you review Bill C-68, an act to amend the Fisheries Act. I am here today representing the Forest Products Association of Canada, or FPAC.

FPAC is a voice for Canada's wood and pulp and paper producers nationally. Canada's forest industry employs over 230,000, and operates in over 600 communities from coast to coast. FPAC members manage forests on over 90 million hectares of land across Canada. This is primarily done on provincially managed land. All FPAC members are third party certified to one of three independent certification standards—the Canadian Standards Association; the Sustainable Forestry Initiative, SFI; or the Forest Stewardship Council, FSC.

The forest sector engages in planning for sustainable land use. We develop long-term forest management plans that include aquatic and terrestrial habitat and biodiversity objectives utilizing stakeholder input, science-based approaches, and engagement with local communities and indigenous communities.

When we appeared in front of this committee in December 2016, we spoke to the robust provincial regulations that forestry operations must comply with as well as the third party audited certification regimes that all FPAC members are certified under.

Specific to Bill C-68, I would like to identify current amendments that we notionally support, and identify a number of current amendments that will require further consideration.

To begin with, FPAC is supportive of the provision to empower the minister to establish advisory panels. In particular, we encourage these advisory panels to have individuals or organizations that have experience as proponents. In addition to a formal advisory panel, I would suggest earlier informal multi-interest advisory capacity in the development of the regulations and policies.

Second, FPAC is supportive of “agreements” as referred to in proposed subsection 4.1(1). Our strong recommendation is that equivalency agreements are pursued and recognized between provincial governments, indigenous governing bodies, and DFO to provide for more efficient and effective implementation of the regulations. This will require DFO to prioritize the development of regulations in which equivalency with other jurisdictions could be assessed in the short term, prior to coming into force. Provinces have continued to revise and standardize their own laws, regulations, and guidance for fish and fish habitat over time. We believe this would support efficient and effective policy implementation.

Third, FPAC supports and encourages DFO to recognize robust standards and codes of practice, as referred to in proposed section 34.2(1). Our member companies adhere to regulatory requirements under provincial and federal laws, and in addition employ practices—referred to as best management practices or standard operating procedures—to avoid or mitigate harm to fish and fish habitat. This due diligence that the forest sector employs towards fish and fish habitat has continued to be in place pre- and post-2012. In fact, our standards and operating procedures with respect to fish and fish habitat have continued to improve through the implementation of environmental management systems, forest certification, and evolving provincial regulations.

The vast majority of the work or projects that the forest sector engages in near fish habitat are watercourse crossings—culverts and bridges. New innovations and continual improvement inform our standard operating procedures. For example, in the 1990s and early 2000s, through partnership work with DFO and the development of the operational statements, forest companies have widely transitioned to using such new technology as clear-span bridges for fish streams. These crossings have much better environmental performance than the older technology used previously, 15 years ago.

FPAC, professional foresters, and professional biologists working within our member companies and provinces continue to work with technical experts, such as FPInnovations, the National Council for Air and Stream Improvement, and partners like Ducks Unlimited, on implementing best practices. These practices address sediment and erosion control, culvert and bridge design and maintenance, integrated road access, and the maintenance of hydrologic and aquatic ecosystem function in areas where we operate.

We strongly encourage DFO to work with us to establish and recognize existing codes and standards with robust effectiveness monitoring programs, such as forest certification, to recognize the practices that avoid harm to fish and fish habitat.

While I'm on the topic of forestry certification standards, I will state that relevant requirements within the certification standards speak to protection of riparian areas—areas adjacent to permanent waterways—the protection and maintenance of sites that are biologically or culturally significant, the use of ecosystem-based management practices, and the development of long-term research and monitoring programs focused on biodiversity.

Now I would like to identify a few components of Bill C-68 that we believe require further consideration or clarification, as they pose potential concerns with regard to how they may be implemented.

The first is the amendment referred to in proposed subsection 35.2(1) on ecologically significant areas. Although we notionally support the identification of such areas, we want to see science, knowledge, and agreed-to processes developed to identify such areas.

The second is a general concern with the capacity of DFO to implement and enforce potentially expanding provisions while developing aquatic health baselines and monitoring cumulative effects moving forward.

We also want to identify the significance and challenge of climate change impacts, and would hope the department builds an understanding of watershed changes due to climate change. There may be other federal departments, such as Natural Resources Canada, that can contribute significant knowledge and expertise on climate change impacts, as well as adaptation practices. We recognize an increase in DFO funding announced recently in the 2018 budget, but we encourage the committee to consider the scope and ability of the department to implement the proposed act. We are hopeful that DFO will receive the necessary support to conduct this type of cumulative effects monitoring.

In summary, we encourage the minister and department to draft regulations that would enable equivalency agreements. We encourage the minister and department to establish multi-interest advisory capacity in the short term and to develop and recognize codes and standards. There is an opportunity for government to recognize the continued research and implementation in improving BMPs and in adapting practices on an ongoing basis, as well as the robust indicators and effectiveness monitoring programs established through third party audits.

We encourage that appropriate transition time and instruments be thought through to ensure that responsible proponents have a clear process identified while the necessary regulations and policy are developed.

Thank you again for the opportunity to provide feedback on this important topic.

I welcome your questions.

[The Chair, Liberal, Bernadette Jordan]

Thank you very much, Ms. Lindsay.

We will now be moving on to Bernie for 10 minutes, please.

[Bernie Berry, President, Coldwater Lobster Association]

Thank you, Madam Chair, for the opportunity to present today in front of the Standing Committee on Fisheries and Oceans.

My name is Bernie Berry, and I am President of the Coldwater Lobster Association, which is located in southwest Nova Scotia. Our association represents lobster fishermen who ply their trade in lobster fishing area, LFA, 34.

LFA 34 is the most lucrative lobster fishing area in Canada. LFA 34 has approximately 970 licence holders, and the landings for the 2016-17 season hover around 50 million pounds. Landed value is in the range of $350 million to $370 million, and this fishery is MSC-approved as are all Canadian lobster fisheries.

The lobster fishery in southwest Nova Scotia is the main economic influence on the economy in the region. The strength of the lobster fishery in southwest Nova Scotia comes from the fact that the vast majority of licence holders are independent. This leads to the spreading and sharing of the wealth that is harvested from the sea. The stock is very strong and plentiful because of the stewardship that fishermen have demonstrated over time.

For these fishermen, and the communities they support, continued independence of the fishermen is a must. The lobster licences must remain in the control of these small independent business owners, the fishermen themselves. This will allow for the continued success, not only of the lobster fishery but also of the rural communities. The licences must remain independent to support the next generation of lobster fishermen, and to allow them to have the opportunity to continue the success of the previous licence holders.

Coldwater Lobster Association believes one avenue to achieve this is through the Fisheries Act. The owner-operator, fleet separation, and PIIFCAF, the acronym for preserving the independence of the inshore fleet in Canada's Atlantic fisheries, could and would be enhanced by making all these policies part of the regulatory regime and/or a condition of licence.

The result of an initiative like this would be the elimination of corporate infiltration into the lobster sector. The policies would now be regulations, and the penalties could be more substantial and applied in a timelier fashion for the instigators trying to circumvent the regulations. If properly designed and installed as a regulation, decisions could be made on a case-by-case basis at a regional level, and possibly an area level of DFO enforcement.

An area that is not covered very well in the Fisheries Act is the potential of foreign ownership of fishing licences and fish-buying licences. As the rule now applies, companies that have Canadian fish-buying licences for various species of fish must be 51% Canadian owned and controlled.

Unfortunately, this is not monitored or overseen very closely, and any good law firm can disguise the true ownership of these companies. This leads to foreign control, not only of a company but the quota and access to numerous Canadian fish stocks. The profits and benefits from a Canadian public resource are siphoned off to individuals and boardrooms abroad.

Coldwater Lobster Association believes that the benefits of fishing licences should flow to the harvesters who hold the licences and also to their coastal communities. The product caught by the fishermen, once on land, should also be used to enhance the economic viability of these rural communities.

A problem that is not being addressed is the generational turnover of fishing licences to a new set of young entrepreneurs. The main difficulty that is being encountered by the potential new independent licence holders is obtaining financing.

With the success of the present independent licence holders, the value of fishing licences has increased substantially in the last couple of decades. The average age of lobster licence holders in LFA 34 is approximately 55. Almost half the licences in LFA 34 will possibly change hands in the next 10 years for various reasons. The new entrant needs financial help in acquiring these valuable lobster licences to kick-start their career as a new entrepreneur in the community.

Coldwater Lobster Association believes that in order to have a smooth transition into the next generation of fishermen, it will take a collaborative approach from the federal government and some of its departments, such as ACOA, DFO, Industry Canada, the provincial government through its fisheries loan board, and chartered banks along with the industry itself to come forth with a suite of options for the new entrant to choose from to obtain financing.

Any type of backlog or slowing of this transition from the older generation to the new independent small business owner will have a dampening economic effect on the industry and the communities it supports.

Coldwater Lobster Association appreciates the time the committee has afforded our organization to speak on this very important issue, and we hope to be back in the future, because the lobster fishery is evolving quickly and there are numerous challenges ahead that will need to be discussed with all involved.

Thank you again.

[The Chair, Liberal, Bernadette Jordan]

Thank you, Bernie.

It's a little bit difficult to see if you want to chime in on anything, because you're on the phone, but if there's ever a question put forward that you may want to answer, just indicate that you have a comment on it. That would be great.

[Bernie Berry]

Yes, absolutely.

[The Chair, Liberal, Bernadette Jordan]

Okay, thanks.

Pursuant to the motion adopted on May 1, 2018, the round of questions will be five minutes for all parties. We can get through two rounds each, so it looks as though we'll each get 10 minutes.

For the first five minutes, we're going to go to Mr. Finnigan.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you Madam Chair.

Thanks to all our witnesses here this morning for helping us to go over Bill C-68.

I'll start with you, Mr. Berry, since your opening remarks are fresh for us. It's not hard to see that you favour the owner-operator. We've had many discussions here at the committee about that. Are you happy with how the strengthening of that portion of the act has evolved? Are you okay with that? Are there any hitches you can see?

[Bernie Berry]

It is an improvement to what was in place. The key is, hopefully by this coming fall, that a lot of this stuff will be ironed out, passed into law, and stuff like that. I think what the minister and the department are trying to do will have a positive effect on keeping these fishing licences in the hands of independents.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you.

You also mentioned the generational turnover. As you said, the price of those licences has skyrocketed to a point where even though it's a lucrative fishery, not many banks will finance newcomers. How do you propose that we try to fix that?

I'm going to throw out something to which you're probably going to say “absolutely not”. Should the government own those licences and not put a value on them? I'm not saying that for right now, but is that a way to move forward? The fisher would not have that licence or a value attached to it. I'm just going to throw that out and see what you think about it.

[Bernie Berry]

I don't think we can take that approach now. There's been too much water under the bridge. What you're talking about is basically what goes on, for example, in the main lobster fishery, where the government owns the licence and when the gentleman is ready to retire, it's just given back to the government and a new entrant is picked through almost a random draw. Unfortunately, that's not the system we have, so I don't think we're going to replace that, for various reasons.

A lot of the people who are in the fishery now are the reason this fishery is worth so much. They've worked hard. For most of the fishermen now, these licences are part of their retirement package. So you'd have to address that on both sides, not just with the people getting in but also with the people getting out.

I think the key is that, at least for the young individuals, if all the parties involved—as I said, federally, provincially, and the industry itself—come up with some sort of a plan to get the young guys into..... The big stumbling block, I guess, is the down payment or the money up front and stuff like this. Most of the younger gentlemen wanting to get into it are 25 to 30 years of age, and that's a steep.... I'll speak only for LFA 34. To get a down payment for an outfit that would include a boat, licensing, and gear in LFA 34, you're going through the chartered banks, and they require 25% to 30%. That amounts to about $300,000.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you, Mr. Berry. I agree. I just wanted to hear your thoughts on that.

Mr. Lansbergen, you mentioned the voluntary transfer of licences to indigenous. How do you think that would work? I'm just curious. Voluntary doesn't usually lead to much, as far as I'm concerned. I'd like to have your answer on that.

[Paul Lansbergen]

The government already has a program for “voluntary relinquishment”, to use the government's language from the B.C. case. It's the willing buyer, willing seller approach.

There are some questions. How willing is the seller if they're not given much of an option? If the government wants to reallocate a certain fishery for reconciliation, then it should come to that fishery, to the participants, and talk to them about what amounts would be desired for reallocation. Perhaps the fishery participants themselves can figure out who may want to exit and who may want to sell to the government, but giving participants no choice I don't think is the best approach.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Quickly on forestry, I know that a lot of the clear-cuts warm up the springs that flow into the river. We have major issues on the Miramichi with the salmon. Part of it is due to that. Can you give us a quick view of that?

[Kate Lindsay]

I think you're referring to riparian...?

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Yes.

[Kate Lindsay]

In forestry operations, for all major operators in Canada, including eastern Canada—we've done some audits of Atlantic Canada—the width of the buffers that companies are leaving maintains stream temperature for fish and fish habitat. I can share that with you.

[The Chair, Liberal, Bernadette Jordan]

I'm sorry. I have to cut you off there and go for our next five minutes to Mr. Arnold.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Thank you, Madam Chair, and to all three of you, thank you for being here and on the phone.

Mr. Berry and Mr. Lansbergen, perhaps both of you can answer this question.

I've heard concerns from fishermen about their grown children wanting to take over their parent's fishing licence and being unable to do so because there are multiple siblings involved and the licence has to held by one individual licence-holder. They aren't able to form a corporation, because a corporation isn't able to hold a licence. Can you elaborate on any of this that you've heard and the possible solutions for it?

[The Chair, Liberal, Bernadette Jordan]

We'll start with Mr. Berry since he's on the phone, if that's okay, and then we'll go to Mr. Lansbergen.

[Bernie Berry]

I think that is the case. It's simply the rule that a licence can only be held by one person. It's something that we have to contend with. I don't think cases like this actually come up very often, where you have numerous sons and/or daughters who want to share in a licence. Usually, it's fairly straightforward. I'm not saying that it doesn't happen, but it's just simply the case that only one person can have the licence in their name at one particular time. Again, on a case-by-case basis, that's something we'd have to look at.

[Paul Lansbergen]

Quite frankly, our membership really hasn't discussed the details of that particular provision, so I don't have a comment at this time on that one.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Thank you. I think it's something that needs to be looked at, because I have been approached by fishermen and their families with that issue.

Ms. Lindsay, you spoke about the equivalency of regulations. This is something that came up in our last meeting as well. It's about the pancaking of different layers of regulations between federal and provincial levels, and now with possible indigenous co-management in there as well.

Can you describe some of the potential pitfalls of that? I come from B.C. We lived through the Forest Practices Code in the 1990s in B.C. and saw a volume of conduct codes that basically stood three feet high on a desk. Can you explain some of your concerns or how there may be some issues with the bill?